SINGAPORE — Shares in Asia-Pacific dropped in Monday morning trade, as Japan’s markets plummeted. Meanwhile, China kept its benchmark lending rate unchanged.
Japanese stocks led losses regionally, with the Nikkei 225 falling 4%. The Topix index shed 2.86%.
Losses were seen in most sectors in Japan, with shares of automakers such as Nissan and Honda falling more than 4% each. Shares of Fanuc slumped nearly 6%. Among financials, Mitsubishi UFJ Financial Group shares fell 2.85% and Mizuho Financial Group declined 2.12%.
Markets in Asia-Pacific slip
MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.45% lower.
“Markets continue their post-FOMC slump as concerns over rate normalisation continues to keep a lid on risk sentiment,” analysts at Singapore’s OCBC Bank wrote in a note dated Monday.
Last week, the U.S. Federal Reserve raised its expectations for inflation and moved forward the timeline of its interest rate hikes, setting off a surge in the dollar index against a basket of its peers.
The U.S. dollar index was at 92.326 after a recent climb from levels below 91.2.
China on Monday announced that the one-year Loan Prime Rate (LPR) was kept unchanged at 3.85% while the five-year LPR was also held steady at 4.65%. That was in line with expectations of majority of analysts in a snap Reuters poll, who had predicted no change to the one-year Loan Prime Rate as well as the five-year LPR.
Currencies and oil
The Japanese yen traded at 109.71 per dollar, stronger than levels above 110.5 against the greenback seen last week. The Australian dollar changed hands at $0.7489, still struggling to recover after its fall last week from above $0.768.
— CNBC’s Patti Domm contributed to this report.